The area's largest distributor of videocassettes, compact discs, tapes and records hired its first-ever chief financial officer this month, responding to its own recent growth and an increasingly uncertain economy.

Patrick A. Labriola, 41, became senior vice president of operations and chief financial officer for Schwartz Bros. Inc. Sept. 1. He said his role in the Lanham-based company is to minimize costs and bolster the company's reserve for protection against customers who can't pay it.

"Since I've been here I've seen a tendency towards innovation," he said. "My goal is to see that innovation happen and make it as profitable as possible."

Company officials and others familiar with the industry said that task will be a challenge. A economic slowdown has affected retail music and video stores up and down the East Coast, causing some Schwartz Bros. customers to fall behind in their payments and others to file for bankruptcy protection.

When Wall to Wall Sound & Video Inc. of Cinnaminson, N.J., filed for protection from creditors in Bankruptcy Court July 20, it owed Schwartz Bros. more than $600,000. Labriola would not disclose the exact amount owed to the company by stores that have filed for reorganization under Chapter 11 of the Federal Bankruptcy Act, but he said the Wall to Wall account represented most of the total.

"It is a lot like a bank; we give them their inventory and just count on them paying," Labriola said. "We have definitely tightened our credit-granting policies and stepped up our collection activities."

Chairman and co-founder Stuart Schwartz said the company will rely on Labriola to maintain its financial stability. "We're really going to be looking to him to see where and how we can make cost cuts and order more economically," Schwartz said.

Sales at Schwartz Bros. have nearly doubled in the past five years, jumping from $64 million in 1984 to $110 million in 1989, and the company last year added a warehouse and marketing office in Atlanta to its facilities in Cleveland and in West Caldwell and Cherry Hill, N.J.

The company has nearly tripled its fund to protect against stores that can't pay their bills, to more than $466,000 as of July 31

Ranked No. 41 among public companies in the Washington area with 1989 revenue of $97.9 million, Schwartz Bros. hired Labriola nine months after he resigned as treasurer for Woodward & Lothrop, the Washington-based department store chain. Labriola came to Woodies as assistant controller in 1978 and was promoted to director of financial reporting in 1979 and treasurer in 1982.

A former senior executive at Woodies who did not want to be quoted by name described Labriola as being "very deliberate, very conscientious, a good financial mind and very hardworking."

Although financially sound, Woodies is in the midst of a costly renovation funded by its owner, real estate developer A. Alfred Taubman. Since 1988, Taubman has invested $110 million to allow Woodies to improve its stores and meet hefty interest payments despite a drop in operating income.

Labriola said his departure from the chain "has nothing to do with me being discouraged or disappointed about the future; it was just time for me to take care of myself personally."

He spent the months between leaving Woodies and joining Schwartz vacationing and conducting a slow, methodical job search. "I was going for this type {of organization}," Labriola said. "This was my own opportunity to expand my sphere of influence, to be in control of the corporation."